Down Payment Assistance

I have been in the mortgage business for 13 years and was not a big fan of the DPA programs during the seller's market and time of exploding home prices. I did fund some purchases and heavily scrutinized the values. I think eliminating the program during the housing downturn was a bad decision. During the seller's market the program basically helped the buyer's only but in the current market it will help homeowner's sell their properties and possibly avoid more foreclosures and distressed properties. If a seller participates in a DPA program today it is truley a seller's concession and not a premium.The default rate on Fha mortgages associated with DPA is not even close to the default rate on the other Alt A and Subprime mortgages due to the underwriting requirements for income stability and payment shock.
Therefor I support the bill to bring back the downpayment assistance program. I would also support bringing in the lender to participate in the funding of the program.
The downside to the Down Payment Assistance program is the excess profit many mortgage brokers put into the transaction. I think that if the program is brought back, only Mortgage Bankers should be allowed to appove these through a direct endorsment by FHA. Mortgage Bankers have more risk in the event of default and would be required to deliver good quality loans to Lenders.
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